This summer was quite an interesting time for mortgage rates. Mortgage rates fell a little more than one-third of a percentage point during the summer, seemingly reaching all-new lows every week. Yet as summer has begun to wind down, so have the declines.

For the last six weeks or so, rates have wandered in a very narrow range and seem to be finding some consistency. According to our latest Market Trends Newsletter, “Provided the economy gets no worse, and there is no return of financial panic, mortgage rates don’t really have much place to go.”

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According to the most recent numbers, since it was first introduced in 2008, the homebuyer tax credit helped 3.3 million homeowners and cost the country $23.5 billion.

After President Obama extended the closing deadline to the second portion of the homebuyer tax credit back on July 2, 2010, most of us thought that was it for the credit. However, the homebuyer tax credit has been back in the news ever since HUD Secretary Shaun Donovan failed to give a reporter a straight answer when asked whether the administration was considering a third tax credit.

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“The concept of ownership is far from dead, but the Wild West approach to financing it is dead’’
-Jack Manning (co-founder of real estate investment company Boston Capital)

Post housing bubble, home sales were so dead that Washington developed a tax incentive for Americans to buy homes. You may remember it, it was called the homebuyer tax credit (and we’ve had more than one of them). Even with the tax credits, home sales remained low. The drop off in sales we’ve witnessed after each of the tax credits have expired have been so pronounced that Washington has even considered rolling out the homebuyer tax credit for a third time.

Paul McMorrow, associate editor of CommonWealth magazine and a Boston Globe columnist, says that the low levels of home sales aren’t something that should necessarily shock or even scare us. He writes that the significant drop in home sales have to do with more than just the country’s ongoing economic struggles and the “post-tax-credit hangover.” McMorrow writes that the lack of sales is “also evidence of a fundamental shift in national housing policy.”

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The homebuyer tax credit is getting its second wind…or should I say third wind? The homebuyer tax credit has been back in the news ever since HUD Secretary Shaun Donovan failed to give a reporter a straight answer when asked whether the administration was considering a third tax credit.

Yet while the tax credit may be in the news again, the general consensus — coming from sources as diverse as writers to home builders and realtors — is saying it shouldn’t come back: Read the rest of this entry »

The bursting of the housing bubble and the continued drag it has placed on our overall economy has caused many of us to debate, or at least question, where we stand on the American dream and its relation to homeownership.

Late last year we wrote a post titled, “Is renting the new American dream?” A few months back we wrote about how “…the American dream of home ownership turned into a nightmare of debt and foreclosure” (a quote from David Wessel of the Wall Street Journal). Each of those posts questioned the old ideal that, as Americans, homeownership is something we all should strive for and is a gauge of our overall success. Maybe most of us are better as as renters as opposed to owners.

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Economically speaking, things aren’t feeling all that different now from when we were mired in the recession. Last week’s disappointing GDP report of 1.6% (2nd quarter 2010) was the exact same reading we saw one year ago.

Federal Reserve Chairman Ben Bernanke addressed the country’s disappointing economic growth at the annual Economic Symposium in Jackson Hole, Wyoming. The chairman expressed both optimism for the coming year and that the Fed still has tools it can employ to ward off deflation or even a double-dip recession.

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Saturday

“As if getting a mortgage wasn’t hard enough“:

We all know that lenders today are incorporating much stricter standards for mortgage borrowers, but I have never heard of anything like this before:

When Linda Falcão applied for a mortgage from Wells Fargo, she didn’t realize she would be required to write the type of essay that’s more commonly included with a college application…

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It takes a lot more than just low mortgage rates to spin the wheels of the housing market; and that couldn’t be more apparent than it is right now. Mortgage rates continue to fall week after week — according to HSH.com the weekly average for the 30-year Conforming fixed rate fell to 4.69% (week ending 7/16/10) — and yet the Mortgage Bankers Association reported the lowest level of mortgage application activity since 1996:

Yet it seems that the economic slowdown which began in May became more entrenched in June, as more signs of weak activity accumulate. Conforming 30-year loans shed two basis points from last week to establish the latest record low, but while low rates have created some new demand for refinancing, the applications index from the Mortgage Bankers Association of America stands at levels not seen since 1996 — and there is little indication that it will pick itself up off the mat anytime soon.

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1). Who is and who should be ultimately responsible when it comes to a failed home loan? Some feel as though it’s entirely the borrower’s fault — they should have known better.

“There’s much regarding the borrower-is-responsible view which is attractive, including simplicity,” writes financial expert Peter Miller. “That said, borrower responsibility should be seen as a nuanced concept, one which requires a look at both principle and circumstances.”

Miller goes on to examine quite a few circumstances that help provide a balanced approach to ultimately deciding who’s at fault and who isn’t.

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The summer months always tend be slow(er), at least as housing is concerned. After the spring home-buying season, real estate activity slows, people take vacations, go away for long weekends. Instead of worrying about house hunting, borrowers are more concerned with barbeques, content to push their buying decisions down the line a few months.

“Summer is generally a lazier time of the year for borrowers,” said HSH VP Keith Gumbinger.

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